Somerset West lawyer challenges debt administrators

A lawyer from Somerset West is challenging debt administrators who are profiteering from debtors repayments. In some cases it was found that debt administrators charge approximately four times more than the legal limit allows for their services.

Somerset West lawyer, Eduan Mathee who runs a debt administration company called Outadebt, has collected many of the accounts which show excessive fees being deducted.

Though it is illegal to charge more than a 12.5% service fee for the administration of debt, some companies charge up to 50% for this service - four times more than what is allowed.

A Cape Flats resident who preferred not to be named said that this is akin to paying R20.00 for a loaf of bread when the price is currently R5.00

When the administration company is taken to court, the case is viewed in isolation and it benefits only a single debtor while the rest of the accounts being administered by the company are still charged illegally high fees.

The illegal operators thus lose one debtor's account after being declared unfit to administer the account, but are soon after appointed in another case.

Mathee believes that the bank accounts of debt administrators who charge more than the legal limits allow, should be frozen, and their business be placed under curatorship.